US Oil Update: Crude Settles Higher as Trump Warns Iran Ceasefire 'On Life Support'

Crude oil futures settled higher in after-hours trading on Monday after President Trump dismissed Iran's latest peace proposal and declared a fragile month-long ceasefire to be on "life support," stoking fears of a prolonged blockade in the Strait of Hormuz.

Front-month West Texas Intermediate crude futures rose by 2.75% to $98.25 per barrel, while Brent futures were up 3.37% to $104.70/bbl.

Trump is reportedly meeting with his national security team to discuss next steps in the Middle East conflict, including possibly resuming military action after he rejected Iran's response to a US peace proposal.

"I would call it the weakest, right now, after reading that piece of garbage they sent us, I didn't even finish reading it," Trump told reporters at the White House. "I would say the ceasefire is on massive life support."

US President rejected Iran's demands for a total end to Washington's naval blockade and war reparations, calling the response "stupid" and "unacceptable."

The continued closure of the Hormuz since late February has severely disrupted global flows of crude, fuels, and gas, with the International Energy Agency calling it the biggest supply shock in history.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said on Monday that the conflict was "not over," raising fears that tensions in the Middle East could escalate again and further threaten energy supplies.

"After briefly trading down to USD 96 last week on renewed hopes the strait would reopen, Brent has rebounded above USD 105," Saxo Bank strategists said, citing Morgan Stanley analysts who described the Middle East conflict as a "race against time."

Iran has called for an end to the war on all fronts, including Lebanon, where Israel is fighting Iran-backed Hezbollah militants. Tehran also demanded compensation for war damage and resumption of Iranian oil sales.

ING strategists said the oil market remains heavily headline-driven, with prices surging after Trump rejected Iran's latest peace plan.

Iranian foreign ministry spokesman Esmail Baghaei said Tehran's proposal for ending the recent war was reasonable, as the US continues to insist on "unreasonable demands" shaped by the Israeli regime.

On Monday, the country's Speaker of Parliament, Mohammad Bagher Ghalibaf, said Iran's armed forces are battle-ready to deliver a crushing, well-deserved response to any aggression.

Tehran reportedly deployed small submarines to act as an "invisible guardian" of the Hormuz amid a series of rejected peace deals with the US.

Kpler said that 53 vessels operated by the world's top 10 container shipping lines entered the Persian Gulf before the outbreak of conflict, of which 79% are unable to exit.

63% US Citizens Say Gas Price Spike Hurting Household Finances, Reuters/Ipsos Poll Says

About 63% of US citizens said rising gasoline prices hurt their household finances, up from 55% in a March poll, according to a Reuters/Ipsos poll published Monday.Reuters/Ipsos collected responses online from 1,254 US adults nationwide between May 8 and May 11.Among Republicans, 51% said higher gasoline prices affected their finances, compared with 74% Democrats.Over two months after US and Israeli strikes began on Feb. 28, the Iran conflict continued to raise concerns over energy markets and rising fuel costs, the poll showed.After Iran disrupted nearly one-fifth of global oil flows through the Strait of Hormuz, the conflict lifted US gasoline prices by roughly 50%, Reuters reported.Ahead of the November midterm elections, Republicans face mounting pressure as 65% of respondents held Republicans responsible for higher fuel prices, while 27% said it was because of the Democrats.About 80% of Americans expect gasoline prices to rise further, while nearly 28% said they may delay, shorten or cancel summer travel plans if prices stay elevated.Trump began his second term in January 2025, campaigning to lower costs for US consumers.A total of 66% respondents said Trump had not clearly explained US military involvement in Iran.

OPEC April Oil Output Falls to Lowest Level Since 2000 Amid Hormuz Disruption, Reuters Analysis Says

OPEC oil output fell to its lowest level in over two decades in April as the US-Israeli conflict with Iran disrupted Gulf exports and effectively shut the Strait of Hormuz, according to a Reuters analysis on Monday.The Reuters analysis cited data from LSEG, tanker-tracking firms including Kpler, sources at oil companies, OPEC, and industry consultants.Production from the 12-member Organization of the Petroleum Exporting Countries dropped by 830,000 barrels per day over the month to 20.04 million b/d in April, the survey showed. This marked OPEC's lowest output since at least 2000, excluding later changes in membership.Reuters also revised March production down by 700,000 b/d following an update to its Saudi Arabia estimate.The decline came despite plans by eight OPEC+ producers, including Russia, to begin raising output in April under an agreement to gradually unwind supply cuts.Those hikes failed to materialize after the outbreak of war with Iran on Feb. 28 severely disrupted tanker traffic through Hormuz, a critical export route for Gulf oil producers.Kuwait recorded the largest drop in production during April after enduring a full month of export disruptions, Reuters said. Saudi Arabia and Iraq also posted declines in output.The UAE was the only Gulf producer to increase production during the month, aided by export infrastructure that bypasses the Strait of Hormuz. Tanker-tracking data indicated higher UAE exports in April.Outside the Gulf, Venezuela and Libya also raised output, partially offsetting losses elsewhere in the group.

US Oil Update: Crude Settles Higher as Trump Warns Iran Ceasefire 'On Life Support'

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